The Active Stock Market Trader, or Traders of Other (Crypto ect.) Market's Thing's Thread.

Biggles
... and up go the markets. Makes no sense to me. Is there going to be another big drop like in 2008/09?
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I have to think so.

I try to sell on up days, because I figure my trade is going to be given the least favorable timing. I just assume a small-time guy like myself comes well after the multi-million dollar trades from the bigtime operators. So if things are going down, I figure my trade will get punched through at the end of the day. At least on an upward-trending day I can hope that my trade won't be executed way below where I put it at.

I know I can put a minimum on it, but I'd probably set the price floor below the wiggle room that I'm talking about.

I held back on executing another 10% in case it goes up more. If we see another few days of 2% gain or something, I'll probably cash more.
 
Upon further review, I think if the markets are generally up on Monday, I'll sell that next 10%. The rest of it rides no matter what.
 
Danoff
Upon further review, I think if the markets are generally up on Monday, I'll sell that next 10%. The rest of it rides no matter what.
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"This is crazy. So, if a cure happens tomorrow the market will shoot up to new highs, why? Its previous high was way way way beyond the point of logical and many folks were sounding the alarm bells before the coronavirus. But a cure will send the market probably 10% higher than the previous high. That lack of logic makes me fear this market. Nothing makes sense anymore. The market no longer feels connected to reality. Rather its based on the newest hype news. Months ago the trump administration got about 10% out of the daily, "china trade pact almost done". They announced that probably 15x and every time the market skyrocketed.

The market only lost 2 or 3% for the tarriffs to begin with, but gained 10% for the possibility of them ending? What are the implications of this sort of disconnect? Traders and analyst are not any more capable of predicting than a coin flip. The market is based on very loose logic at best. The fed is constantly putting their foot on the scale and a balance sheet is no longer even a thought. Deficits are no longer a thought. I am asking this question in hopes of receiving an answer, its not rhetorical. What are the implications of the feds dramatic new role in the market, which is almost like the ceo of the stock market whose role is to pump their stock at all cost? What is the implications of this detatchment from logic? Will it correct, or is this just a totally different game where the guy who critically invests is a sucker?

But with interest rates at zero, the Fed propping up the market beyond anything previously imagined & there's no where else to put money so ...
 
Biggles
Why?
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I searched for a thread like this before I started this one. There was one from 2002 I think, it went off topic after just a few messages and had no real responses.

Biggles
You would think .. but I remember my financial planner recommending investing in an energy-oriented mutual fund after oil prices tanked in 2015 on the theory that they could only go up from there. Oil is now down about 60% from where it was at that point. :ouch:

If I look back at my investment history it is full of bad decisions made for the "right" reasons ... & very occasionally good decisions made for who knows what reasons.
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I am just starting to invest. Oil was like $18 a barrel on friday it is normally around $60. Google USO, it is a fund that follows the price of oil. Oil is super cheap right now. Oil cannot stay this low for ever.
 
Biggles
"This is crazy. So, if a cure happens tomorrow the market will shoot up to new highs, why? Its previous high was way way way beyond the point of logical and many folks were sounding the alarm bells before the coronavirus. But a cure will send the market probably 10% higher than the previous high. That lack of logic makes me fear this market. Nothing makes sense anymore. The market no longer feels connected to reality. Rather its based on the newest hype news. Months ago the trump administration got about 10% out of the daily, "china trade pact almost done". They announced that probably 15x and every time the market skyrocketed.

The market only lost 2 or 3% for the tarriffs to begin with, but gained 10% for the possibility of them ending? What are the implications of this sort of disconnect? Traders and analyst are not any more capable of predicting than a coin flip. The market is based on very loose logic at best. The fed is constantly putting their foot on the scale and a balance sheet is no longer even a thought. Deficits are no longer a thought. I am asking this question in hopes of receiving an answer, its not rhetorical. What are the implications of the feds dramatic new role in the market, which is almost like the ceo of the stock market whose role is to pump their stock at all cost? What is the implications of this detatchment from logic? Will it correct, or is this just a totally different game where the guy who critically invests is a sucker?

But with interest rates at zero, the Fed propping up the market beyond anything previously imagined & there's no where else to put money so ...
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I see an isolated quote mark around this post. Who wrote this? You? Someone you copied and pasted?
 
Dotini
I see an isolated quote mark around this post. Who wrote this? You? Someone you copied and pasted?
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Yes. it's a quote from a random commentator on a financial markets website. It corresponds pretty much exactly with my sentiments, so I just quoted it.

Chrunch Houston
I am just starting to invest. Oil was like $18 a barrel on friday it is normally around $60. Google USO, it is a fund that follows the price of oil. Oil is super cheap right now. Oil cannot stay this low for ever.
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Hey, I'm not disagreeing ... just pointing out how hard it can be to understand/anticipate movement in the markets. While the markets in general have enthusiastically bounced back over the last 4 weeks based on "looking forward" to a return to "normal", that is not the case with oil. A few years ago, oil was as high as $160/barrel & people were taking about "peak oil", now you can't give the stuff away. I haven't looked at the relationship of current oil company stocks to the current oil price, but you'd have to assume that these companies still retain enormous value.

Edit: As of Monday 20th April oil has just dropped lower, to "levels not seen since 1999". I have to admit, I don't remember oil prices being so low in 1999 & I'm not sure why they were at the time. I'm assuming that that means not inflation adjusted ... which would make them even lower today.

FWIW here is a take on what's happening with oil. I guess the take-away is that many small & mid-sized companies won't survive - their stocks have sunk the most. The bigger companies, with deeper pockets & more diversification should be OK, but their stocks have accordingly only dropped by about 40%

https://www.fool.com/investing/2020/04/02/should-you-buy-oil-stocks-right-now.aspx
 
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How are Raytheon, Halliburton and Lockheed Martin's stock prices doing?

MIC is always the shady influencer in these things.
 
Eunos_Cosmo
Are we in the upside down yet?
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Well, one interesting fact today: the Dow/S & P dropped by a significant amount today but ... the TSX (Toronto Stock Exchange) which general moves in tandem with the American markets was up today. And the TSX is generally seen as more "resource" based ie. oil. I have no idea what the explanation is for that. :odd:
 
I've got the majority of my portfolio in oil (USO). I'm laughing my way to hell. :lol:
 
Chrunch Houston
No, bought. I bought some at $4.51, and the other day bought more at $4.17.

Right now it is at $2.58.
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So you bought shares in an ETF trading fund, its not as simple as it sounds.

It's basically tether for oil if you know crypto and the risks do exist given it's based on a ETF and can cease to exist unlike oil.
 
So, the market is back up again today, on news of additional US stimulus money being approved & (weirdly) Trump threatening Iran for threatening Gulf shipping helping oil prices by suggesting the possibility of a cut in supply from the Gulf.

I guess the pessimistic view of the current state of the market an be summed up by the comparison of these two charts:

MW-IE963_mc2004_20200422103601_NS.jpg


MW-IE962_158756_20200422103502_NS.jpg


The optimistic view puts faith in the pandemic being brought under control quickly & the extraordinary stimulus being applied on a weekly basis by the Fed/US government working to continue to prop up the economy & stock market valuations. Any pretence of a "free-market" has gone out the window. The US government has more or less "nationalized" the stock market by propping up businesses with borrowed money on a massive scale. It's starting to look like everyone can just take a few months sabbatical & leave @Danoff & @Joey D in charge of working to keep everything afloat. 👍
 
Biggles
So, the market is back up again today, on news of additional US stimulus money being approved & (weirdly) Trump threatening Iran for threatening Gulf shipping helping oil prices by suggesting the possibility of a cut in supply from the Gulf.

I guess the pessimistic view of the current state of the market an be summed up by the comparison of these two charts:

View attachment 913683

View attachment 913684

The optimistic view puts faith in the pandemic being brought under control quickly & the extraordinary stimulus being applied on a weekly basis by the Fed/US government working to continue to prop up the economy & stock market valuations. Any pretence of a "free-market" has gone out the window. The US government has more or less "nationalized" the stock market by propping up businesses with borrowed money on a massive scale. It's starting to look like everyone can just take a few months sabbatical & leave @Danoff & @Joey D in charge of working to keep everything afloat. 👍
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If it goes up tomorrow, I'm dumping more. This seems like a fair time to unload.
 
Call me crazy, but it's hard to accept a stock market recovery with massive parts of the economy in shutdown, and record unemployment.

I think we are probably in the return to "normal" stage if anything, the market is in complete denial and the drops still don't reflect reality.
 
mustafur
Call me crazy, but it's hard to accept a stock market recovery with massive parts of the economy in shutdown, and record unemployment.

I think we are probably in the return to "normal" stage if anything, the market is in complete denial and the drops still don't reflect reality.
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I think it's a more cynical stage, maybe call it the "well, it shouldn't be going up but it is going up, so I might as well get in there while I can" phase. It's basically a conscious rejection of economic fundamentals and rational thought. Kinda like a Ponzi scheme...which is kind of what the stock market has become. Every thing seems to be driven by FOMA-Inertia rather than reason.

That leads me to believe a much more significant crash is to come.
 
Inflation means a unit of currency will effectively buy less than it did in prior periods. The costs of goods and services will rise faster than your income. Traditionally, gold and real estate have a reputation as good inflation hedges.




Get Ready for the Return of Inflation
Fed actions have increased the quantity of money in the U.S. economy at a blistering rate.


The economists Milton Friedman and Anna Jacobson Schwartz demonstrated in “A Monetary History of the United States” that a collapse in the quantity of money was the main cause of the Great Depression. Hoping to avoid a repeat, the Federal Reserve in recent weeks has poured money into the economy at the fastest rate in the past 200 years. Unfortunately, this overreaction could turn out just as poorly; history suggests the U.S. will soon see an inflation boom.

Friedman and Schwartz used a broad definition of the quantity of money that included all bank deposits, and found that U.S. money stock shrank by 38% between October 1929 and April 1933. Some prominent economists—including Princeton’s Paul Krugman and Columbia’s Joseph Stiglitz—claim that money growth no longer matters much, but they’re wrong. After all, the 2007-09 recession showed that the ever-changing fortunes of the banking system have a significant effect on demand, output and employment. From 2010-18, growth rates of the quantity of money and nominal gross domestic product were virtually identical at 4% a year.

The Fed publishes weekly data on the U.S. commercial banking system’s balance sheet, allowing what amounts to real-time diagnosis and prognosis of the money supply. Even in late February the Fed wasn’t making major new decisions in response to the coronavirus’s spread, but that changed suddenly with President Trump’s announcement of a national emergency on March 13. Over the next two weeks, the central bank introduced a range of radical and unprecedented new policies intended to ease the pain of the lockdown measures.


From March 11-18, deposits at U.S. banks rose by 2.2%. In the next seven days they rose 2.5%. And in following week they rose 1%. In other words, in a mere three-week period they increased by almost 6%. The contrast between the Fed’s passive response to the Great Depression, when the quantity of money fell by 1% a month, and its recent hyperactivity, when the quantity of money has climbed by nearly 2% in a single week, could hardly be greater. If the recent rate of increase continued for a year, compound interest would cause bank deposits to swell by 175%. Since bank deposits dominate the measure of money described by Friedman and Schwarz, the quantity of money would soar at a similar rate.

Excluding the years immediately after the Revolutionary War, the past few weeks have seen by far the highest rate of monetary expansion in U.S. history. The Fed might defend itself by saying that its “shock and awe” tactics have given financial markets confidence that the coronavirus won’t cause a long and deep recession. And its massive bond purchases—more than $500 billion between March 11 and April 1—surely won’t continue at the same rate for the rest of the year.

Nevertheless, the problem now becomes financing the much-enlarged budget deficit. Some commentators have speculated that over the next year or so the federal deficit could reach $4 trillion. It is certainly likely to hit $3 trillion. To a large extent the gaps will be financed by the banking system, with such monetary financing of the budget deficit adding to the amount of money in the economy.

It’s reasonable to assume that by spring 2021 the quantity of money will have increased by 15% and possibly by as much as 20%. That wouldn’t quite match the peak rates of expansion seen during and immediately after the two world wars of the 20th century, but it could surpass peacetime records, outpacing the previous peaks in the inflationary 1970s.

Policy makers have repeatedly called the battle against the novel coronavirus a war. As in wartime, federal expenditures are rising sharply while tax revenues are being hit by the lockdown. Both World War I and World War II—and, indeed, the Vietnam War—were followed by nasty bouts of inflation. If that happens again, policy makers today being cheered for their swift, decisive action will instead have to answer for their grave lack of foresight.
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https://www.wsj.com/articles/get-ready-for-the-return-of-inflation-11587659836
 
Dotini
Inflation means a unit of currency will effectively buy less than it did in prior periods. The costs of goods and services will rise faster than your income. Traditionally, gold and real estate have a reputation as good inflation hedges.




Get Ready for the Return of Inflation
Fed actions have increased the quantity of money in the U.S. economy at a blistering rate.



https://www.wsj.com/articles/get-ready-for-the-return-of-inflation-11587659836
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...I've been dumping stock for cash pretty heavily in the past few weeks. This is obviously on my mind.

It seems almost impossible for all economic outlooks to remain true. We're told all of these things are coming:

- further stock crash
- real-estate crash
- inflation
- low interest rates

Inflation, especially with low interest rates, would create a real-estate boom. On the other hand, inflation isn't generally compatible with low interest rates. A stock crash and real-estate crash isn't super compatible with inflation either (as we've seen quite recently).

Of these, real-estate crashing seems the least likely to be true.
 
Danoff
Of these, real-estate crashing seems the least likely to be true.
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I want to agree with this. I own real estate. Some of it is income producing in the form of rent. Fortunately, my tenant's job is deemed essential, he has kept his job and can afford to pay the rent.

It's absolutely unbelievable how many jobs are not considered essential.

I can see commercial real estate going into a rough patch.

I can see residential real estate stagnating.

Long term, everything will go to hell if there's no solution to the pandemic.
 
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Dotini
Okay. But for some other reason then, there seems to be quite a lot of unemployment at the present time. I wonder why?
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It turns out that there's this big pandemic that's changing how people spend money...

Were you thinking that we could prevent some of that unemployment by casting a wider "essential" net?
 

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